REWARDING

THE UPLAND POOR (in Asia)

FOR ENVIRONMENTAL SERVICES

That They Provide

(R U P E S)

Marian S. delos Angeles

Environmental Policy Economist

International Center for Research in Agroforestry (ICRAF) Southeast Asia Regional Programme

Bogor, Indonesia

PRESENTATION

INRM and research and development in agro-forestry

RUPES

SETTING FOR DEVELOPING MARKETS FOR

ENVIRONMENTAL SERVICES:

INDONESIA

PHILIPPINES

VIETNAM

The INRM research process-the Consultative Group on Agricultural Research (CGIAR)

The INRM research process-the Consultative Group on Agricultural Research (CGIAR)

4. Tradeoffs and options

Analysis of tradeoffs and competing interests Identification of ranges of flexible adaptive options

5. Outcomes

Extrapolation Dissemination Policy implementation Wide-scale adoption

2. INRM research (research on alternative solution)

3c. Human well-being

Risk management Participation of

resource users indecisions

3a. Production function

Quantity of food and fibre Quality Genetic x Environment

matching efficiency

1. Participatory problem analysis

Food insecurity Increasingly poverty Degrading natural environments

3b. Ecosystem functions

Nutrient cycling Carbon sequestration Biodiversity Water balance

6. Feedback

stem-flow

through-fall

rainfall cloudinterception

lateral

outflow

percolation

rechargeinfiltration

surfaceevaporation

transpiration

canopy waterevaporation

uptake

quick-flow

baseflow

{

surface run-on

sub-surfacelateral

inflow

surface run-off

Stream:

WHY Programme RUPES?

Benefits and costs of conservation are borne unevenly

– beneficiaries do not pay– providers do not get compensated– costs are borne by disadvantaged groups– in cases where payments are made, they

do not reach the poor providers

Evolving Consortium Center for Int’l Forestry Research (CIFOR)

World Resources Institute (WRI)

World Conservation Union (IUCN)

Winrock International

Conservation International

Economy and Environment Program for Southeast Asia (EEPSEA), IDRC

Food and Agriculture Organization (FAO)

national level partners

other investors

OUTPUTS identification of ES in a range of settings

– costs and benefits;

– distribution– land use options

an array of mechanisms developed and tested with poor communities that will reward them for ES supplied

transparent enabling institutional environment – supported at various levels

awareness to enhance ES raised among government officials, producers and consumers of these services

effective partnerships among consortium members and regional, national and local organizations

WHICH ENVIRONMENTAL SERVICES? watershed protection services

( WPS)

biodiversity conservation (BCS)

carbon sequestration and storage (CSS)

WHAT SERVICES?

watershed protection services ( WPS)– hydrological functions

How much water?

When?

Where?

What quality?

– Upstream and downstream users– Transboundary

WHAT SERVICES?

biodiversity conservation (BC)– anthropogenic value, or human-centered

• use value– consumption and production

– recreation, amenity

– option

• non-use value– existence

– bequest

– intrinsic value– local and non-locals

WHAT SERVICES?

carbon sequestration and storage (CSS)

– stocks– flows

– mostly global

WHICH REWARD MECHANISMS for watershed protection?

market-based– tradable water rights, marketable permits– development of property rights– bilateral agreements between providers and users

revenue share from surrogate markets – electricity pricing– water tariffs

– irrigation service fees

social recognition public investments

WHICH REWARD MECHANISMS for biodiversity conservation? share from bioprospecting/royalty fees concessionary finance:

– DEBT FOR NATURE SWAP (FPE)– DEVPT. ASSISTANCE (SIBP)

revenue from eco-tourism fees direct payments for conservation easements increased market access - eco-labeling allocation from trust funds tax breaks

WHICH REWARDMECHANISMS

for carbon sequestration and storage?

revenue from payments for carbon credits/offsets

budget allocation from carbon taxes

WHICH GENERAL MECHANISMS?

Tenure security Trust funds

– general– specific

Cross compliance mechanisms

RESEARCH QUESTIONS

How can these services and their benefits be quantified?– amounts provided and how?

– WPS• streamflows and water quality• erosion and sediment transport• impacts of changes in land-use

– BCS• indices and scale• levels and interactions

– CSS• net impact; over-all land-use

RESEARCH QUESTIONS How are/will be the rewards made to the providers?

– Who are the providers?– economic costs of supplying these services

• financial and opportunity costs

– bundle rewards for jointly provided services? – property rights

What are the amounts to be collected from the beneficiaries, if any?– Who are the gainers and how much?– valuation of benefits from using these services

DEVELOPMENT QUESTIONS

What form and manner of collection and reward?– mechanisms for payments – mechanisms for receiving the reward – forging agreements and NSS– monitoring of services, payments and transfers

What are the institutional requirements?– policies – types and levels of stakeholders– reducing transactions costs

• (information, contracting, enforcement)– forging partnerships– establishing national facility ?

STRATEGY QUESTIONS Which services, where?

– Current ICRAF sites – Current IFAD sites– Sites of collaborators

What levels of engagement?– Collaboration with partners: site level & policy

• international: IUCN, WRI, Winrock Int’l, CFI, CI• national: NARS governments; donors & lenders• local: communities, lgu’s, ngo’s, civil society

– four years 2002-2006– sites in Asia

• Phil, Indonesia, Vietnam (tentative, level 1)

• Thailand, China (tentative, level 2• Nepal, India, etc. (tentative, level 3)

ENVIRONMENTAL TRANSFER MECHANISMS

Two aspects :

PAYMENT FOR ENVIRONMENTAL SERVICES BY BENEFICIARIES

REWARD TO PROVIDERS OF ENVIRONMENTAL SERVICES

RUPES Site Development Processes

Number of action pilot sites for environmental services agreements

Year 1 2 3 4 5 Total

Level A sites for Implementation +3 +3 . . 6

Level B sites forAssessment 6 assessed

3 selected 4 assessed3 selected . . .

10

No. of sites contingent on relevance, funding, partnerships

Application Domain

Fraction of poor that can potentially

be reached

Net impact on livelihood security-- - 0 + ++ +++

Only feasible for exceptional cases,

huge opportunities for nearly all

or somewhere in between?

How can we increase the likelihood of ++ impacts for many of the upland poor?

Where should we start -- with the most likely ‘winners’?

RUPES: initial work

Environmental service market development

for Indonesia, the Philippines and Vietnam

potentials

RUPES: likely location of initial work

Key Statistics INDONESIA PHILIPPINES Viet Nam

Population (million) 212.092 75.65 78.137 Land area Imillion has) 181.157 29.817 32.549 Pop. density (persons/ha) 1.17 2.54 2.40

Forest 2000 (million ha) 104.99 5.79 9.82 change,1990-2000 (mil ha/yr) (1.31) (0.09) 0.05 in per cent (1.17) (1.42) 0.54 Protection forest (mil has) 20 1 5.7

W.Coastal

Mountain

Piedmont

Peneplain

Swamp

Jambi

Ecological zonesof SumatraIndonesia

‘Alternatives to Slash and Burn’ benchmark areas

India

Papua NewGuinea

India China

Burma

Thailand

VietnamLaos

Cambodia

Malaysia

Indonesia

Philippines

Taiwan

Lampung

Landsat MSS 1973 SPOT 1999

Sumberjaya, South Sumatra, Indonesia

the use of fire for large scale oil palm establishment

as a weapon both by large-scale companies and smallholders in conflict

Slash-and-burn techniques used by smallholders for the establishment of rubber plantation

ten sites; collaboration with CIFOR and EU assisted

Rubber seedlings can be transplanted into gaps in existing agroforests

“Sisipan”

Clonal planting material successfully established with

limited weeding in a system post slash & burn

fully segregated landscape

fully integrated landscape

0 1 2 3 4 5

intensive agriculture

natural forest

integrated, multifunctional landscape: crops, trees,

meadows and forest patches

Which situation do you think is the most desirable for your country?

abcdef

Time-averaged carbon stocks for Sumatra

Natural forest 254 Mg ha-1

Rubber agroforest 116

Oil palm plantation 91

Cassava/Imperata 39rotation

Potential gain

75 Mg ha-1

Init

ial l

oss

220

Mg

ha-1

0 1000500-500

Profitability at social prices June 1997

$/ha

Plant species richness(#spp/standard plot)

120

90

60

30

Natural forest

Rubber agroforest

Oil-palm monoculture(limited data)

CRAS improved(uncertain data)

PRASimproved(no data)

Approximate domainfor smallholder agroforestry

NEGOTIATION SUPPORT SYSTEM (NSS) in Indonesia: Bringing science and knowledge to the table

LandUse

Filter

Road,canal

Interaction

resources/landscape

mosaic

AgreedChanges

Spontaneous

changes

Multistakeholderdialogues

NegotiationProcess

Refined science and knowledge•Bio-physic•Policies

NEGOTIATION SUPPORT SYSTEM for Indonesia:

Decentralization process and regional autonomy, particularly related to the distribution of NRM authorities in government levels.

Localized negotiation efforts to capture local contexts

State forest land delineation

Recognition of Adat Rights

Socialized Forest Community Management

Multi Level Negotiation of NSS (Case Of Indonesia)

G

Univ,Ngo Comm

Site Level

District

Province

•Act No.22/ 99 LocalGovernment

•Act No.25/ 99 FinancialBalance

•Act No.41/ 99 Forestry

•Act No.5/ 90 NRConservation

•Act No.24/ 82 Spatial Plan

•Gov Decree No.25/ 00Authority of GovernmentLevels

•PP No.62/ 98Dcentralization CertainForest Management ToLocal Gov.

•Ect

LEVELSRelevance Policies toNRM and Regional

Autonomy

Multi-stakeholder NegotiationForum

G

Univ,Ngo Comm

G

Univ,Ngo Comm

PHILIPPINE SETTING

Sites with entitlements

• Community-based forest management:– secondary forests

• Social Forestry in agrarian reform areas

• Protected Areas, although delineation slow

• lands of indigenous peoples

with Certificate of Ancestral Domain Title– on-going process

PHILIPPINE SETTING Economic Instruments:

Potential Directions for Refinement

– various resource user fees in Protected Areas• devise mechanism for allocating revenues from the Integrated

Protected Area Fund

– hydropower fees for watershed protection,

recently passed Power Sector Reform Act• ensure upland providers share in revenues

– on going formulation of bioprospecting fees, royalties and sharing mechanisms

CONSUMERS

Government in beha lf

of their constituents

Firmsusing “environmental input”

Direct Consumers of environmental output/ services• water users• recreationists• hydropower consumers

• etc.,.

ENVIRONMENTAL

SERVICES

(Buyers)

International Agencies (GEF, WB, USAID, etc.,) in

Behalf of globalinterests

UPLAND POOR

CHAIN OF PROVIDERS(Sellers)

International Agencies

(GEF, WB, USAID, etc.,) providing development

assistance

Public Sector Investment in Environment(DENR, LGU, SCU)

Private/ Business Sector

(Water Districts, Hydropower Plants, Water

Bottling Co., etc)

Phil Setting from: H. Francisco(2002)

VIETNAMSocial Capital: COMMUNES

Increasing Market Orientation

• 20 hectare, 50 year contracts forest & ag’l lands

» tradeable

• irrigation fees, auctions for aquaculture

Land-use options flexibility:tree plantations grains

aquaculture vegetables

horticulture animal husbandry

North Vietnam: Red River catchment

tributary to Mekong River; hill tribes

VIETNAM

Dong Cao (Hoa Binh)

Watershed protection vs crop productionFood securityWaNuLCAS & subcatchment models, AKT &PRA, FFS

Cho Don Upland

Dissemination of new soil conservation techniques ToT, extension school, ‘landcare’

Ha Giang Remote upland

Extension of upland development FFS and ´landcare´

WRI& ICRAF